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It’s hard to believe that the trio – Yahoo, Google, and Bing – might soon be turning into a duo. Just last week, April 4,2012, Yahoo confirmed that the entire site will be undergoing reconstruction, and therefore laying of nearly 2,000 employees. The past tells us that layoffs are never good, but the real indicator that something might be wrong is simply the competition. According to comScore, 1 billion people around the world use Google each month, and it is slowly becoming more and more difficult for another search engine to compete. This large of a business has the power to eliminate its competition, and it appears as though Yahoo is feeling the affects.

Consider some of the features Yahoo does offer and how Yahoo began, then take a look at where they are today and where they might be in the future.

The Beginning: History of Yahoo and Its Services

Currently, Yahoo has about 14,000 employees and is headquartered in Sunnyvale, California. Aside from only being a search engine, Yahoo offers a directory, an email service, news, groups, Yahoo answers, online mapping, video sharing, and even fantasy sports options. The company was founded by Jerry Yang and David Filo in January of 1994 and began to grow rapidly until 2000. At one point, the company’s stocks were as high as $118.75 a share. It was around 2004 that Yahoo began using its own search engine and its own email service, but the company began to struggle in 2008.

In 2008 Microsoft actually tried to buy Yahoo for $44.6 billion, but Yahoo rejected. From that point on Yahoo has been continually changing upper management and struggling to stay afloat in Google’s world.

The Present: The Changes to Come

Aside from the 2,000-person layoff, Yahoo will be making some more changes in upper management. Scott Thompson, former President of PayPal, was just appointed the new CEO, but that seems to be the only hopeful news for the company. The Vice President of computational advertisings as well as JC Mao, advertising sciences head and Blake Irving, Chief Product Officer, have all left the company. Yahoo Labs head Prabhaker Raghavan left the company to work with Google, and Raghu Ramakrishnan left Yahoo to work for Microsoft.

However, Yahoo remains hopefully that their new CEO and their 375 million annual savings due to layoffs will be able to bring the company to the thriving position it once held. According to Search Engine Land, Thompson says that a streamlined organizational structure will better enable Yahoo to compete in the future.

The Future: The Fate of Yahoo

Reuters reported that Thompson will plan to focus on three areas: core media and communications, platforms, and data. Yahoo also made a search outsourcing deal with Microsoft back in 2009 that is still in effect for the company.

The fate of Yahoo is yet to be determined. Most experts agree that Yahoo is headed into a downward spiral that will likely be too hard to overcome. The last product they launched was a handful of mobile apps, and those did not seem to interest the public. Thompson is going to have a lot of work to do if he thinks he can turn this company around, and it will likely take a while before we see results.

What do you think will happen to Yahoo in the future? Do you think they will be able to compete with Google and get back to being successful?